What is management accounting?
In short, management accounting combines accounting, finance and management with the leading edge techniques needed to drive successful businesses.
Management accounting is a profession that involves partnering in management decision making, devising planning and performance management systems,and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization’s strategy
Management accounting or managerial accounting is concerned with the provisions and use of accounting information to managers within organizations, to provide them with the basis to make informed business decisions that will allow them to be better equipped in their management and control functions.
In contrast to financial accountancy information, management accounting information is:
- primarily forward-looking, instead of historical;
- model based with a degree of abstraction to support decision making generically, instead of case based;
- designed and intended for use by managers within the organization, instead of being intended for use by shareholders, creditors, and public regulators;
- usually confidential and used by management, instead of publicly reported;
- computed by reference to the needs of managers, often using management information systems, instead of by reference to general financial accounting standards.
Chartered management accountants:
- advise managers about the financial implications of projects
- explain the financial consequences of business decisions
- formulate business strategy
- monitor spending and financial control
- conduct internal business audits
- explain the impact of the competitive landscape.
The management accounting skillset
Our members are qualified to work across an organisation, not just in finance. Because in addition to strong accounting fundamentals, CIMA teaches strategic business and management skills:
- Analysis – they analyse information and using it to make business decisions.
- Strategy – they formulate business strategy to create wealth and shareholder value.
- Risk – they identify and manage risk
- Planning – they apply accounting techniques to plan and budget.
- Communication – they determine what information management needs and explain the numbers to non-financial managers.